nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒03‒22
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Time Use and the Geography of Economic Opportunity By Mookerjee, Sulagna; Pedersen, John; Slichter, David
  2. Gender Gaps in Latin American Labor Markets: Implications from an Estimated Search Model By Tejada, Mauricio; Piras, Claudia; Flabbi, Luca; Bustelo, Monserrat
  3. What Do Happiness Data Mean? Theory and Survey Evidence By Daniel J. Benjamin; Jakina Debnam Guzman; Marc Fleurbaey; Ori Heffetz; Miles Kimball
  4. Lessons from Denmark about Inequality and Social Mobility By James J. Heckman; Rasmus Landersø
  5. Diversity in Schools: Immigrants and the Educational Performance of U.S. Born Students By Figlio, David N.; Giuliano, Paola; Marchingiglio, Riccardo; Ozek, Umut; Sapienza, Paola
  6. Endogenous Education and Long-Run Factor Shares By Gene M Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson
  7. Effects of Recent Minimum Wage Policies in California and Nationwide: Results from a Pre-specified Analysis Plan By David Neumark; Maysen Yen
  8. The Consequences of Hosting Asylum Seekers for Citizens' Policy Preferences By Zimmermann, Severin; Stutzer, Alois
  9. Who got the Brexit blues? The Effect of Brexit on Subjective Wellbeing in the UK By Powdthavee, Nattavudh; Plagnol, Anke C.; Frijters, Paul; Clark, Andrew E.
  10. Job Search during a Pandemic Recession: Survey Evidence from the Netherlands By Balgova, Maria; Trenkle, Simon; Zimpelmann, Christian; Pestel, Nico

  1. By: Mookerjee, Sulagna; Pedersen, John; Slichter, David
    Abstract: Recent work suggests that the area of the United States in which a child is raised has a substantial effect on their income in adulthood. We measure differences in time use between areas which are better or worse at producing incomes in adulthood. The main differences are that, in areas which produce higher incomes, people spend more time at work, and adults spend more time with children. The data does not support some theories of what makes communities effective at producing human capital: People do not spend more time on educational activities, or on community events and institutions, in areas which increase incomes by more.
    Keywords: time use, intergenerational mobility
    JEL: D13 J22 J24 J62
    Date: 2021–03–03
  2. By: Tejada, Mauricio (Universidad Alberto Hurtado); Piras, Claudia (Inter-American Development Bank); Flabbi, Luca (University of North Carolina, Chapel Hill); Bustelo, Monserrat (Inter-American Development Bank)
    Abstract: We develop and estimate a search model that captures the specific characteristics of Latin America and Caribbean (LAC) labor markets and the crucial differences between men and women. Labor force participation decisions are integrated in the labor market dynamics, taking into account sample selection over unobservables. The model is estimated on four LAC countries (Argentina, Chile, Colombia and Mexico) and on three education levels (Primary, Secondary and Tertiary). We use the estimated model to study changes in gender gaps and in output implied by policies that increase the labor force participation of women. We focus on four policies: an increase in the provision of child care, an increase in average female productivity, a gender-based contribution rate for formal employees, and changes in formality and informality costs. We find that the impact on the extensive margin of the female labor supply is the main channel responsible for the policy-induced increase in output.
    Keywords: gender gaps, female labor force participation, labor market frictions, search and matching, Nash bargaining, informality
    JEL: J24 J3 J64 O17
    Date: 2021–03
  3. By: Daniel J. Benjamin (UCLA / NBER); Jakina Debnam Guzman (Amherst College); Marc Fleurbaey (Paris School of Economics); Ori Heffetz (Cornell University / The Hebrew University of Jerusalem / NBER); Miles Kimball (University of Colorado Boulder / NBER)
    Abstract: What utility notion do self-reported well-being (SWB) questions measure? We clarify the assumptions that underlie existing applications regarding the (i) life domains, (ii) time horizons, and (iii) other-regarding preferences captured by SWB data. We ask survey respondents what they had in mind regarding (i)–(iii) when answering commonly used—life satisfaction, happiness, ladder—and new SWB questions. Respondents put most weight on the present and on themselves—but not enough to interpret SWB data as measuring notions of flow utility and self-centered utility. We find differences across SWB questions and across sociodemographic groups. We outline actionable suggestions for SWB researchers.
    Keywords: happiness, life satisfaction, subjective well-being, survey questions
    JEL: D69 D90 I31
    Date: 2021–02–01
  4. By: James J. Heckman (The University of Chicago); Rasmus Landersø (Rockwool Foundation)
    Abstract: Many American policy analysts point to Denmark as a model welfare state with low levels of income inequality and high levels of income mobility across generations. It has in place many social policies now advocated for adoption in the U.S. Despite generous Danish social policies, family influence on important child outcomes in Denmark is about as strong as it is in the United States. More advantaged families are better able to access, utilize, and influence universally available programs. Purposive sorting by levels of family advantage create neighborhood effects. Powerful forces not easily mitigated by Danish-style welfare state programs operate in both countries.
    Keywords: Inequality, social mobility, family influence, power of place
    JEL: H24 H44 J12 J18
    Date: 2021–03
  5. By: Figlio, David N. (Northwestern University); Giuliano, Paola (University of California, Los Angeles); Marchingiglio, Riccardo (Northwestern University); Ozek, Umut (American Institutes for Research); Sapienza, Paola (Northwestern University)
    Abstract: We study the effect of exposure to immigrants on the educational outcomes of US-born students, using a unique dataset combining population-level birth and school records from Florida. This research question is complicated by substantial school selection of US-born students, especially among White and comparatively affluent students, in response to the presence of immigrant students in the school. We propose a new identification strategy to partial out the unobserved non-random selection into schools, and find that the presence of immigrant students has a positive effect on the academic achievement of US-born students, especially for students from disadvantaged backgrounds. Moreover, the presence of immigrants does not affect negatively the performance of affluent US-born students, who typically show a higher academic achievement compared to immigrant students. We provide suggestive evidence on potential channels.
    Keywords: immigrant students, educational attainment
    JEL: I21 I24 J15
    Date: 2021–03
  6. By: Gene M Grossman (Princeton University); Elhanan Helpman (Harvard University); Ezra Oberfield (Princeton University); Thomas Sampson (London School of Economics)
    Abstract: We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. When more physical capital raises the marginal product of skills relative to that of raw labor, an increase in a broad measure of embodied human capital raises the capital share in national income for any given rental rate. When education is chosen optimally, a dynamic equilibrium is characterized by an inverse relationship between the level of human capital and both the rental rate on capital and the difference between the interest rate and the growth rate of wages. As a consequence,estimates of the elasticity of substitution that fail to account for levels of human capital will be biased upward. We develop a model with overlapping generations, ongoing increases in educational attainment, and technology-driven neoclassical growth, and show that for a class of production functions with capital-skill complementarity, a balanced growth path exists and is characterized by an inverse relationship between the rates of capital- and labor-augmenting technological progress and the capital share in national income.
    Keywords: neoclassical growth, balanced growth, human capital, education, techno-logical progress, capital-skill complementarity, labor share, capital share
    JEL: E25 I26
    Date: 2020–09
  7. By: David Neumark; Maysen Yen
    Abstract: We analyze the impacts of recent city minimum wage increases in California and nationwide, following a pre-analysis plan (PAP) registered prior to the release of data covering two years of minimum wage increases. For California cities we find a hint of negative employment effects. Nationally, we find some evidence of disemployment effects for teens, but not young adults or high school dropouts. City-specific analyses provide limited evidence of adverse effects on the share low-income, but the pooled city analysis does not; the national analysis generally finds no impact on the share low-income, with one exception that may reflect prior trends.
    JEL: J23 J38
    Date: 2021–03
  8. By: Zimmermann, Severin (University of Basel); Stutzer, Alois (University of Basel)
    Abstract: Asylum migration is a major societal challenge in the Western world affecting residents' policy preferences. We analyze the effects of newly hosting asylum seekers in a given municipality on local citizens' preferences in terms of migratory and redistributive policies as well as of support or opposition to political change in general. Policy preferences are measured based on citizens' actual voting behavior in national referendums in Switzerland between 1987 and 2017. We exploit the administrative placement of asylum seekers across municipalities and find that citizens vote temporarily slightly more restrictively on immigration issues in national referendums and are less supportive of redistribution than before hosting asylum seekers. Citizens are not more likely to vote for the status quo and not more likely to participate per se.
    Keywords: asylum seekers, direct democracy, political preferences, pro-immigration attitudes, redistribution, status quo effect, voter participation
    JEL: F22 H53 I38 J15 Z13
    Date: 2021–03
  9. By: Powdthavee, Nattavudh; Plagnol, Anke C.; Frijters, Paul; Clark, Andrew E.
    Abstract: We use the 2015–16 waves of the UK Household Longitudinal Study (Understanding Society) to look at subjective wellbeing around the time of the June 2016 EU membership Referendum in the UK (Brexit). We employ measures of both evaluative and affective wellbeing, namely life satisfaction and mental distress, respectively. We find that those reporting lower life satisfaction in 2015 were more likely to express a preference for leaving the EU in 2016, while mental distress was less predictive of pro-Brexit attitudes. Post-Referendum, those with Leave preferences enjoyed an increase in life satisfaction but there was no change in average life satisfaction in the overall sample. In contrast, the average level of mental distress increased in the sample post- Referendum, with no significant difference between those preferring to remain in or to leave the EU. We test the robustness of our results by considering a number of potential caveats, such as sample selection, unobserved individual fixed effects and the interval between interviews. Overall, our results suggest that levels of subjective wellbeing may be both a cause and a result of the 2016 Brexit vote.
    JEL: N0
    Date: 2019–07–01
  10. By: Balgova, Maria (IZA); Trenkle, Simon (IZA); Zimpelmann, Christian (IZA); Pestel, Nico (IZA)
    Abstract: This paper studies job search behavior in the midst of a pandemic recession. We use long-running panel data from the Netherlands (LISS) and complement the core survey with our own COVID-specific module, conducted in June 2020, surveying job search effort of employed as well as unemployed respondents. We estimate an empirical model of job search over the business cycle over the period 2008-2019 to explore the gap between predicted and actual job search behavior in 2020. We find that job search during the pandemic recession differs strongly from previous downturns. The unemployed search significantly less than what we would normally observe during a recession of this size, while the employed search mildly more. Expectations about the duration of the pandemic seem to play a key role in explaining job search effort for the unemployed in 2020. Furthermore, employed subjects affected by changes in employment status due to COVID-19 are more likely to search for a job. Conversely, beliefs about infection risk do not seem to be related to job search in a systematic way.
    Keywords: COVID-19, job search, labor supply, survey
    JEL: J21 J64 J68
    Date: 2021–03

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